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2016 Tax Tips for 2015 Filing Year
From Proprietorship to Corporation - When is the Best Time to Incorporate?
Tax Specialists Brief your Clients About CRA Fraud And E-Mail Scams
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2016 Tax Tips for 2015 Filing Year

2016 Tax Tips for 2015 Filing Year


2016 Tax Tips for 2015 Filing Year- www.aliko-aapayrollservices.com/blog


Did you know that last tax filing season, the average tax refund was just under $1,800, or about $150 a month? That’s a lot of money to give to the government on an interest-free basis. Yet that’s what almost 17 million tax filers did and CRA paid back approximately $30 Billion dollars. Astute tax filers will want to get that money back working for their own futures quickly this year. If that includes you, do file your tax return early and accurately. But make sure you have all your documentation, first.
Make a point of acquiring and reviewing tax software if you are NETFILING this year. If you hire a pro, make an appointment as soon as possible to determine what is needed to meet new tax filing rules and discuss what has changed in your personal affairs. Births, deaths, marriages, divorces, new jobs and job terminations – all can impact the tax return.

The Rule of 72


The Rule of 72 - www.aliko-aapayrollservices.com/blog
The Rule of 72



Written by Sarah Milton
“Compound Interest is the eighth wonder of the world.” – Albert Einstein
Einstein described compound interest as the eighth wonder of the world because he felt that those who understood it, earned it and those who didn’t, paid it. Compounding is what makes saving early and saving regularly such a powerful part of building wealth and it’s also what makes it so hard to get out from under the mountain of consumer debt that so many of us accumulate. In an nutshell, compound interest is earning (or paying) interest on interest. When you earn interest at a compounded rate, your money grows faster because you are earning interest on your total balance (principal + interest) rather than on the principal alone. Similarly, when you pay interest at a compounded rate (as you do with credit cards) your interest charges grow much faster and your debt load gets larger.
We can see the power of compounding in the table below, which shows how $1000 earning 5% annual interest grows over time. The first column shows how the $1000 would grow earning 5% simple interest (earned on just the $1000 principal) and the second column shows how it would grow earning 5% interest compounded annually (earned on the principal + interest).
YEAR
5% SIMPLE INTEREST
5% COMPOUND INTEREST
5
$1,250
$1,276
10
$1,500
$1,629
15
$1,750
$2,079
20
$2,000
$2,653
25
$2,250
$3,386
30
$2,500
$4,322
35
$2,750
$5,516
40
$3,000
$7,040
45
$3,250
$8,985
50
$3,500
$11,467
The Rule of 72
The rule of 72 is a simple way to estimate how long it will take your money to double in value at a given interest rate. If you divide 72 by the annual interest rate, the answer is the number of years it will take to double. For example, 72 divided by 5 is 14.4. This means that, as you can see in the table above, it takes just under 15 years for $1,000 to become $2,000. 15 years later (in year 30) the money has doubled again to be just over $4,000 and, 15 years after that (in year 45) it has doubled again to become more than $8,000. In year 60, it will have doubled yet again and become $16,000. Using this rule, it’s clear to see that both time and interest rate are two key factors in building wealth. At 8% interest, your money will double in 9 years (72 divided by 8 = 9) but it will take 36 years to double earning 2% interest. For a 20 year old, $100 invested at 7% is worth $2,100 at age 65. For a 30 year old, that same $100 invested at the same rate is only worth $1,068 at age 65 and for a 40 year old, $100 invested at 7% is worth just $543 at age 65. This means that, at 40 years old, even though I’m only twice the age of the 20 year old, I have to save four times as much each year in order to achieve the same level of wealth at age 65. It’s a concept that I wish I had understood as a teenager because I’m pretty sure it would have motivated me to manage my money differently!
At the end of the day, saving is always a very personal decision: the choices we make about whether to save, where to save and how much to save, vary enormously from person to person. However, all too often, I hear people in their twenties saying that they’ll wait to save until they’re older because then they’ll be earning more. When you consider how powerful a factor time is in the wealth building equation, it just doesn’t make sense (especially when you consider that just because you’re earning more doesn’t mean you have more discretionary income). If you can do as much with $25 at 20 as you can do with $50 at 30 or with $100 at 40, it makes sense to start the saving habit early.
Even if you feel like you’ve “missed the boat” because you should have started saving years ago, remember that whatever you save today has a greater power to grow than money you save next month, next year or 3 years from now. We can’t change our past choices but we always have the power to choose to change our financial future by making different choices today.
 
 
 
 
 

Enjoy the benefits of filing on time and online


Enjoy the benefits of filing on time and online - www.aliko-aapayrollservices.com/blog


Enjoy the benefits of filing on time and online
Did you know?





Filing your income tax and benefit return and paying what you owe on time helps you avoid possible interest and penalty charges, and ensures that your benefits won't be delayed.
Important facts
  • You have until midnight on or before April 30, 2015, to file your 2014 income tax and benefit return.
  • If you or your spouse or common-law partner is self-employed, you have until midnight on June 15, 2015, to file your return.
  • Any balance owing must be paid on or before April 30, 2015—even if your return is due on June 15, 2015.
What happens if I don't file on time?
When you file your yearly tax return, you are letting the Canada Revenue Agency (CRA) know your current tax situation. Without that information, the CRA can't be sure that you are still eligible to receive certain benefit payments. If you don't file on time, your benefit and credit payments (for example, the Canada child tax benefit and the goods and services tax/harmonized sales tax credit) may be interrupted.
Also, if you have a balance owing and you don't file your return on time, we'll charge you a late-filing penalty. The penalty is 5% of your 2014 balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months. If we charged a late-filing penalty on your return for 2011, 2012, or 2013, your late-filing penalty for 2014 may be 10% of your 2014 balance owing, plus 2% of your 2014 balance owing for each full month that your return is late, to a maximum of 20 months.
In addition to the late-filing penalty, if you have a balance owing for 2014 you'll be charged compound daily interest beginning May 1, 2015, on any unpaid amounts owing for 2014.
Even if you can't pay all of your balance owing right away, you should still file your return on time. You can set-up a pre-authorized debit agreement using the My Account service, or call us at 1-888-863-8657 to make a payment arrangement. By filing on time, you'll avoid the late-filing penalty.
CRA online services make filing easier and getting your refund faster
The CRA's online services are fast, easy, and secure. You can use them to file your income tax and benefit return, make a payment, track your refund, receive your notice of assessment, and more. Did you know that the Government of Canada is switching to direct deposit for payments that it issues? This includes your tax refund and benefits payments? Sign up for direct deposit today! For more information, go to www.cra.gc.ca/getready
 
 

Aliko Payroll Services- Flat Fee Payroll Services -



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Affordable  payroll services  for small businesses . 
Flat fee payroll services.  $600.00/month 
If you do require our  payroll services please feel free to reach out to us at anytime and we will be more than glad to assist.
 
If you have a moment please check out our website 
 
Best Regards  Anila Aliko
Founder and CEO of Aliko-AA Payroll Services 
Phone : 416-908-2725
 
 
 
 
 
 

Pay Yourself First

Pay Yourself First -www.aliko-aapayrollservices.com
 
 
 
Pay Yourself First
 
 
Although submission of a TD1 form is not required each year, it’s always a good idea to ensure that your employer is not withholding more taxes than absolutely necessary – after all, it’s your money.
 
 
The TD1 form – 2015 Personal Tax Credits Return – along with its provincial counterpart, determines how much tax your employer (or other payer) will withhold from your payments. To ensure that you get the money all year long rather than a year from now when you file your tax return, update your TD1 whenever your family situation changes and check it at least once a year.  January is a good time to make that check.
On the TD1 you can claim your own personal amount ($11,327 for 2015), the amount for your spouse or common-law partner, amounts for eligible dependants, the caregiver amount, amount for infirm dependants, amount for pension income, tuition, education and textbook amounts, as well as amounts you are eligible to transfer from your spouse. Parents should note that the exemption for children under 18 is eliminated for 2015 unless the child is infirm.  Even for infirm children, the claim is reduced to $2,093 for 2015 (down from $4,313 for 2014).
A sister form to TD1: Form T1213 Request to Reduce Tax Deductions at Source for Year(s) ______ can also be used to reduce tax withholding for taxpayers who have RRSP contributions, Child Care Expenses, deductible support payments, employment expenses, carrying charges, charitable donations, rental losses or other significant tax deductions. For all expenses except deductible support payments which may be authorized for two years, you’ll need to file Form T1213 each year.  The form must first be sent to CRA for their approval before your employer is authorized to reduce your withholding tax.  Approval may take four to six weeks so the earlier you submit the form the better.
 
 
 
 
 

TFSA Withdrawals


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TFSA Withdrawals


Here is the basic information regarding withdrawals from a tax-free savings account:

Withdrawals will create additional contribution room equal to the amount of the withdrawal, for deposits in future years (not in the year of the withdrawal).

Income earned in  and withdrawals from a TFSA will not affect eligibility for federal income-tested benefits and credits such as

guaranteed income supplement (GIS)

old age security (OAS)

age exemption tax credit

Any fees paid related to the TFSA will not be tax-deductible.

In kind withdrawals can be made, with the investments being transferred to a non-registered account, or as a contribution to an RRSP, subject to available RRSP contribution room.  When in kind withdrawals are made, the value of the transaction will be the current market value of the investment.  This will be the contribution amount if the investment is transferred to an RRSP.  If the investment is transferred to a non-registered account, the current market value at time of withdrawal will be the cost basis for the non-registered investment.  Any subsequent capital gain or loss when the investment is sold will use this value as the cost basis.
If the maximum has been contributed to a TFSA, and then a withdrawal is made, no further amount can be contributed (without penalty) until the following year.  On January 1st of the following year, the withdrawal amount from the previous year will be used to increase your regular annual contribution room.
 
 


Timeless investment wisdom from The Intelligent Investor

 
 
 
Timeless investment wisdom from The Intelligent Investor -www.aliko-aapayrollservices.com
 
 
 
Timeless investment wisdom from The Intelligent Investor
 
 
 
 
 
 
Written by Wayne Rothe
 
 
 
 
“To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.” –The Intelligent Investor, Benjamin Graham
If you only read one investing book in your lifetime, it should be Benjamin Graham’s The Intelligent Investor. Perhaps the greatest investing book ever written, the book will make you a better investor, whether you’re a do-it-yourselfer or you use an advisor.
Graham was a mentor for none other than Warren Buffett, the greatest investor of all time, and his book is filled with the kind of folksy wisdom that Buffett has become known for. Here are some of my favourite quotes from The Intelligent Investor.
“The sillier the market’s behavior, the greater the opportunity for the business-like investor. The intelligent investor is a realist who sells to optimists and buys from pessimists.”
Most people are financially inept, making mistake after mistake, and it has dire consequences to their financial and retirement planning. When making investment decisions, they zig when they should zag. Buy low, sell high? If you can set your emotions aside and buy when things look bad, your returns should improve measurably. Good investors see opportunity amid the carnage. Buy low, not high as many do.
“How your investments behave is much less important than how you behave….The investor’s chief problem – and even his worst enemy – is likely to be himself. “
Our own behavior is, indeed, our greatest threat as investors. Investment markets don’t determine our success, but it’s how we react to them does. Make rational decisions, not emotional ones. Buy good companies and keep them as long as they remain good investments. Trade rarely, unless it’s to buy more of those good companies when their shares tumble. Buy and hold, the Warren Buffett way.
“It should be remembered that a decline of 50% fully offsets an advance of 100%.”
“Never buy a stock because it has gone up or sell one because it has gone down.”
I love good (emphasis on good) investments when they suck. The more they suck the more I like them. If Company A or ABC Growth Fund is a good opportunity at $10 a share, surely it’s a great opportunity at $5 a share as long as nothing has changed to its fundamentals.
Market declines are your greatest opportunity to buy into a rising tide at reduced prices.
“Even the intelligent investor is likely to need considerable will power to keep from following the crowd.”
The crowd is generally wrong. You’ll be more successful being a contrarian than a follower.
“The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.”
It’s not the specific investments you buy that determine your financial success. Do you have a written, goal-based financial plan? Do you buy more of your good investments when times are bleak and your investments are under siege? These things will put you ahead of the guy who chases returns.
“Before you place your financial future in the hands of an adviser, it’s imperative that you find someone who not only makes you comfortable but whose honesty is beyond reproach.”
Do-it-yourself investors believe that they will be more successful by saving a little on their fees but having a pro guide your decisions can be far more important. I believe that most investors have neither the ability nor the interest in managing their own investments, and the mistakes they invariably make scuttle their retirement dreams.
“A defensive investor can always prosper by looking patiently and calmly through the wreckage of a bear market.”
As Sir John Templeton said, the best time to buy is when blood is running in the streets. We can’t predict the exact market bottom, but when markets are down 30 or 40 per cent, maybe it’s time to start buying. Or set up a systematic investment where money is directed monthly from your chequing account to your investment portfolio so you’re buying at all times – in up and down markets.
“Successful investing is about managing risk, not avoiding it.”
Market volatility is the friend of the intelligent, patient investor because it provides great opportunities to buy into a rising tide at sale prices.
Wishing you financial success.
 

Tax cheats beware: zapper use will not be tolerated

Tax cheats beware: zapper use will not be tolerated - www.aliko-aapayrollservices.com
 
 
Tax cheats beware: zapper use will not be tolerated
 
 
 
 
Minister Findlay meets with local businesses to discuss new civil and criminal sanctions for possession or use of electronic suppression of sales software
August 13, 2014 - Saskatoon – Canada Revenue Agency
The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, joined by Minister Lynne Yelich, Member of Parliament for Blackstrap, and Kelly Block, Member of Parliament for Saskatoon-Rosetown-Biggar, today took part in a roundtable discussion with business owners to discuss new sanctions introduced earlier this year to combat the use of electronic suppression of sales (ESS) software and its contribution to the underground economy.
  • Economic Action Plan (EAP) 2013 proposed new administrative monetary penalties and criminal offences under both the Excise Tax Act and Income Tax Act targeting those participating in the use, possession, sale or development of ESS software. Those EAP measures took effect on January 1, 2014.
  • Earlier this year, the Canada Revenue Agency (CRA) began an awareness campaign to ensure that businesses were aware of the new sanctions. The awareness activities will conclude this summer.
  • As of September 1, 2014, the CRA will begin to impose these new civil penalties and criminal sanctions for participating in the use, possession, sale or development of ESS software.
Quick facts
  • ESS software (commonly known as “zapper” software) selectively deletes or modifies sales transactions in point-of-sale systems, electronic cash registers and business accounting systems, leaving no record of the original transaction behind. The software allows businesses to underreport their revenue and avoid paying taxes.
  • Under the new measures, businesses that use, possess, or acquire ESS software will face a fine of $5,000 for the first infraction and $50,000 on any subsequent infraction. Anyone who participates in manufacturing, developing, selling, possessing for sale, offering for sale or otherwise making available ESS software will face a fine of $10,000 for the first infraction, and $100,000 on any subsequent infraction. They may also face criminal charges of up to $1 million in fines, up to a five year jail term, or both.
Quotes
“Our Government is serious about cracking down on tax cheats—including those who manufacture or use electronic suppression of sales software. We now have the tools to penalize these tax cheats with stronger civil and criminal consequences, including fines and even jail time. Participation in the underground economy hurts all Canadians.”
 
“The severity of these sanctions speaks to how serious a crime this is. We are committed to rooting out tax cheats and making sure they are punished accordingly. In keeping with our commitment to reducing red tape, we have enacted these measures without creating additional reporting requirements for compliant businesses.”
 
 

LEGISLATIVE UPDATES

LEGISLATIVE UPDATES - www.aliko-aapayrollservices.com
 
 
 
 
LEGISLATIVE UPDATES
 
 
 
 
FEDERAL UPDATES
GOVERNMENT OF CANADA OVERHAULS TEMPORARY FOREIGN WORKER PROGRAM
On June 20, 2014, the Honourable Jason Kenney, Minister of Employment and Social Development (ESDC), and Chris Alexander, Minister of Citizenship and Immigration, announced a comprehensive overhaul of the Temporary Foreign Worker Program (TFWP) and the creation of new International Mobility Programs (IMPs).
The new IMPs will incorporate those streams in which foreign nationals are not subject to a Labour Market Impact Assessment (LMIA), and whose primary objective is to advance Canada’s broad economic and cultural national interest, rather than filling particular jobs. The LMIA is a labor market verification process whereby ESDC assesses an offer of employment to ensure that the employment of a foreign worker will not have a negative impact on the Canadian labor market. Employers will be required to provide a variety of information about the position for which they want to hire a foreign worker, including the number of Canadians who applied for the position, the number of Canadians who were interviewed, and detailed explanations for why the Canadian workers considered were not hired.
The goal is to ensure the TFWP is only used as intended, as a last and limited resort to fill acute, temporary labour shortages when qualified Canadians are not available.
If you currently participate in the TFWP, or are intending to, find out more detailed information in the official federal government news release and Background Documents.
NEW EMPLOYMENT RULES FOR INTERNATIONAL STUDENTS STUDYING IN CANADA IN EFFECT AS OF JUNE 1, 2014
On June 1, 2014, amendments to the Immigration and Refugee Protection Regulations (Regulation) modifying working rights for foreign nationals, under the International Student Program (ISP), came into force.
Effective June 1, 2014, permits for off-campus work will no longer be required, nor will international students be expected to study full-time for a period of six months prior to seeking such employment.
The new rules governing off-campus work require that international students hold a valid study permit similarly to before, but moving forward, these study permits will not be obtained as easily as in the past. Previously, study permits were issued to students attending any type of educational institution, whether or not accredited or regulated. Such permits will now only be issued to students enrolled at a “designated learning” institution.
Consult the Government of Canada’s website for additional details.
Provincial/territorial updates
At the time of this release, all provincial and territorial jurisdictions have tabled their budgets. The CPA has prepared a Budget Report for each jurisdiction, all of which are available at the CPA’s website. This section of the CPA website is updated with new budget information as it becomes available.
NOVA SCOTIA
NEW NOVA SCOTIA HOLIDAY TO BE KNOWN AS HERITAGE DAY
The Nova Scotia government recently announced that the new statutory holiday to be celebrated on the 3rd Monday of February every year will be known as Heritage Day.
The first Heritage Day celebration will take place on Monday February 16, 2015.
Nova Scotia now joins the jurisdictions of Alberta, British Columbia, Manitoba, Ontario, Prince Edward Island and Saskatchewan, to celebrate a holiday in the month of February.
Access the official News Release for additional information.
ONTARIO
ONTARIO GOVERNMENT PASSES PROVINCIAL BUDGET BILL ON JULY 24 2014
The Ontario Government gave Royal Assent to Bill 14, Building Opportunity and Securing Our Future Act (Budget Measures), 2014which puts into effect the provisions presented on July 14, 2014.
Some of the payroll related measures included:
§  Retroactive tax rate changes for individuals whose incomes are in excess of $150,000
§  The introduction of an Ontario Retirement Pension Plan (ORPP) that would come into effect in 2017
§  The introduction of Pooled Registered Pension Plans (PRPP)
§  The proposal to amend Ontario’s Insurance Act which would require benefits from a long-term disability (LTD) plan to be insured
The Budget also discusses initiatives in other areas that may affect payroll including job training, hiring employees with disabilities and public sector pension plans.
For additional information, consult the CPA’s Ontario Budget Report. The CPA has also prepared a document with the top questions and answers regarding the retroactive tax rate changes.
The Canada Revenue Agency (CRA) has published an updated edition of the T4127, Payroll Deductions Formulas for Computer Programs to enable employers to implement the revised rates in their system effective September 1, 2014.
The September 2014 version of the Payroll Deductions Online Calculator (PDOC) that includes the Ontario tax changes is now available.
The CPA has forwarded a Legislative Briefing: Ontario Personal Tax Changes to its members.
ONTARIO GOVERNMENT PASSES LEGISLATION TO INTRODUCE THREE NEW LEAVES
On April 29, 2014, Bill 21, the Employment Standards Amendments Act (Leaves to Help Families), 2014, passed its third reading with all-party support in the Ontario legislature. The legislation has received Royal Assent and will come into effect on October 29, 2014.
The new legislative measures build on the existing
Family Medical Leave by creating three new job-protected leaves:
§  Family Caregiver Leave: up to eight weeks of unpaid, job-protected leave for employees to provide care or support to a family member with a serious medical condition.
§  Critically Ill Child Care Leave: up to 37 weeks of unpaid, job-protected leave to provide care to a critically ill child.
§  Crime-Related Child Death or Disappearance Leave: up to 52 weeks of unpaid, job-protected leave for parents of a missing child and up to 104 weeks of unpaid, job-protected leave for parents of a child who has died as a result of a crime.
A doctor’s note would be required to qualify for Family Caregiver Leave and Critically Ill Child Care Leave.
Access more information at the websites below:
ONTARIO INTRODUCES EMPLOYMENT LEGISLATION IMPACTING SEVERAL AREAS
On July 16, 2014, the Ontario government introduced Bill 18 Stronger Workplaces for a Stronger Economy Act, 2014. The legislation, if passed will impact several areas within the various labor and employment laws.
Some of the proposed changes include:
§  The elimination of the $10,000 cap on the recovery of unpaid wages by employees through the Ministry of Labour claim process under the Employment Standards Act, 2000.
§  Increasing the limitation period to two years for employees to recover unpaid wages through the Ministry of Labour claim process under the Employment Standards Act, 2000. The current limitation period is six months or one year depending on the type of claim.
§  Requiring employers to provide each of their employees with a copy of the most recent poster (including translations) published by the Ministry of Labour that provides information about the Employment Standards Act, 2000.
§  Making temporary help agencies and their clients jointly and severally liable for unpaid regular wages and unpaid overtime pay.
§  Requiring the Workplace Safety and Insurance Board to assign workplace injury and accident costs to temporary help agency clients when an employee is injured while performing work for the agency’s client.
§  Expanding employment protections for foreign nationals who are in Ontario under an immigration or foreign temporary employee program. The protections include a prohibition on charging a recruiter fee or taking possession of the foreign national’s property, such as their passport or work permit.
§  Tying future minimum wage increases to the Consumer Price Index. The new minimum wage will be announced by April 1 of each year and will come into effect on October 1 of that same year.
Access Bill 18 Stronger Workplaces for a Stronger Economy Act, 2014 for additional details.
The CPA will continue to monitor the progress of these new legislative measures and advise employers accordingly.
NEW ONTARIO LAW EXTENDS PENSION DEATH BENEFITS TO COMMON LAW SPOUSES
With Ontario’s budget having received Royal Assent on July 24, 2014, certain amendments to the Pension Benefits Act (PBA), known as the Carrigan amendments, have become law.
Changes to Section 48 of the Pension Benefits Act modified within Bill 14, Building Opportunity and Securing Our Future Act (Budget Measures), 2014 clarify that in circumstances where a pension plan member is legally married to a spouse from whom they are separated, is living with a new spouse in a common law conjugal relationship, and dies prior to retirement, the common law spouse will be entitled to the pre-retirement death benefit.
Minimum wage update
The following table includes the minimum wages currently in effect in all jurisdictions as well as any rate changes announced at the time of writing.
JurisdictionRate/hourEffective dateFederal
(Canada Labour Code, Part III)
Aligned with provincial/territorial minimum wage in each jurisdictionDecember 1996Alberta§  General$9.95
$10.20
September 1, 2013
September 1, 2014
§  Liquor server$9.05
$9.20
September 1, 2011
September 1, 2014
British Columbia§  General§  Liquor servers$10.25
$9.00
 May 1, 2012
May 1, 2012
Manitoba$10.45
$10.70
October 1, 2013
October 1, 2014
New Brunswick*$10.00April 1, 2012Newfoundland and Labrador$10.00
$10.25
July 1, 2010
October 1, 2014
Northwest Territories$10.00April 1, 2011Nova Scotia§  Experienced workers§  Inexperienced workers$10.40
$9.90
 April 1, 2014
April 1, 2014
Nunavut$11.00January 1, 2011Ontario§  General §  Students under 18 working 28 hours/week or less§  Serving alcohol on licensed property  $11.00
$10.30
$9.55
 June 1, 2014
June 1, 2014
June 1, 2014
Prince Edward Island$10.20
$10.35
June 1, 2014
October 1, 2014
Quebec§  General§  Employees receiving tips$10.35
$8.90
 May 1, 2014
May 1, 2014
Saskatchewan$10.00
$10.20
December 1, 2012
October 1, 2014
Yukon $10.72April 1, 2014
An inexperienced employee is an employee who has not been employed by their current employer or other employers to do their current job for three calendar months.
Will increase each year based on the Consumer Price Index (CPI).
*There are special minimum wage rates for certain categories of employees in government construction work, and counsellors and program staff at residential summer camps.
NEW PCP CERTIFICATION EXPERIENCE REQUIREMENT
The Canadian Payroll Association (CPA) is implementing a one-year Payroll Experience (PE) requirement, effective January 1, 2015, for all Payroll Compliance Practitioner (PCP) candidates. This requirement will enhance the quality of PCP graduates and demonstrate to employers that a PCP certification holder has both the education and experience competencies required to keep organizations compliant.

Read more
As a payroll professional, keeping up with federal and provincial requirements is key. The following article by HRinfodesk concerns a case in Ontario. The conclusions from this case involve the legal implications of not including termination compensation provisions in employment contracts. This may have implications for employment contracts in other provinces.
Limiting termination compensation
By Adam Gorley, Editor, HRinfodesk, published by First Reference, August 2014

In recent termination cases, Ontario's courts have often inferred missing termination notice or severance pay provisions into employment contracts, usually to employers' benefit. But in Paquette v. Quadraspec Inc., 2014 ONCS 2431 (available in French only), the Superior Court has released a decision that suggests a stricter approach. Justice Paul Kane found that where an employer has drafted an employment contract that doesn't comply with the Employment Standards Act (ESA)—either by omission or error—it is inappropriate to assume that the employer intended otherwise.
Facts of the case and decision
The employee, Alain Paquette, had worked for Quadraspec Inc. or its predecessors since 1983. In 1998, the employer made Paquette director general of the company's Oakville operations, under a new contract that was in effect until 2011, when he was terminated without cause or notice. Quadraspec paid Paquette six months of salary in lieu of notice, plus unpaid bonus amounts, in accordance with the contract. The contract expressly limited claims for other unpaid compensation such as benefits or severance to the notice period. Paquette complained that the termination clause of the employment contract was not valid since it prevented him from making claims for these unpaid amounts, contrary to the ESA.
It is well-established that an employer may not contract out of the minimum standards set in the Act, and by attempting to do so, that employer will nullify any offending contractual clause. On termination notice, the ESA states:
Requirements during notice period (section 60.1)
During a notice period, the employer:
(a) Shall not reduce the employee's wage rate or alter any other term or condition of employment;
(b) Shall in each week pay the employee the wages the employee is entitled to receive, which in no case shall be less than his or her regular wages for a regular work week; and
(c) Shall continue to make whatever benefit plan contributions would be required to be made in order to maintain the employee's benefits under the plan until the end of the notice period.
Pay instead of notice (section 61.1)
An employer may terminate the employment of an employee without notice or with less notice than is required if the employer:
(a) Pays to the employee termination pay in a lump sum equal to the amount the employee would have been entitled to receive under section 60 had notice been given in accordance with that section; and
(b) Continues to make whatever benefit plan contributions would be required to be made in order to maintain the benefits to which the employee would have been entitled had he or she continued to be employed during the period of notice that he or she would otherwise have been entitled to receive.
Quadraspec admitted that the clause excluded benefits to which Paquette was entitled, but argued that it understood it had an obligation to pay these benefits to Paquette regardless of the wording of the contract.
However, Justice Kane found that when drafting the contract, the employer intentionally chose a wording that violated the ESA, despite simple valid alternatives. Quadraspec clearly put substantial effort into the drafting of the detailed 15-page employment contract, and as a result, it didn't make sense for the court to infer terms into the ambiguous termination notice clause.
The court further noted that the offending clause looked like an attempt to avoid or limit the employer's obligation to maintain Paquette's benefits during the notice period, placing the onus (and expense) on the employee to challenge the ambiguous provision in court. Justice Kane stated, “Courts shouldn't be assisting employers with such a purpose.” As a result, the court found the termination clause was null and void.
Justice Kane made another important decision in the case. The ESA states that an employer must pay severance to employees of five years or more if its total payroll is greater than $2.5 million. Quadraspec argued that this clause applies only to payroll in Ontario. Since Quadraspec's main operations are in Quebec, and its Ontario payroll was not above the threshold, this interpretation would have meant the employer didn't have to pay severance to Paquette. The court disagreed. It is clear from the reading of the Employment Standards Act and various other relevant statutes that Ontario's legislature did not intend to limit the severance clause to employers' payroll in Ontario. There is simply no evidence that this was the intention.
The Act states:
Payroll (section 64.2)
An employer shall be considered to have a payroll of $2.5 million or more if:
(a) The total wages earned by all of the employer's employees in the four weeks that ended with the last day of the last pay period completed prior to the severance of an employee's employment, when multiplied by 13, was $2.5 million or more; or
(b) The total wages earned by all of the employer's employees in the last or second-last fiscal year of the employer prior to the severance of an employee's employment was $2.5 million or more.
Since Quadraspec's total payroll was more than $2.5 million, and Paquette had worked for the company for more than five years, the court found the employer did owe the employee severance.
This case serves as another clear reminder that it is crucial to draft compliant employment contracts.
Any questions or comments, please communicate with Yosie Saint-Cyr, Managing Editor, HRinfodesk.com at editor@hrinfodesk.com
This article is published on HRinfodesk---an online publication and database of payroll and employment law news, compliance and case commentaries for every jurisdiction in Canada, published by First Reference.
These articles are made available to give you general information and understanding of the law, not to provide legal advice about specific situations or problems. These articles also offer general comments on legal developments of concern to businesses. There is no lawyer-client relationship between you and the author or publisher. Every effort has been made to ensure the accuracy and timeliness of this information. These publications should NOT be relied upon as legal advice or opinions. The reader should always obtain legal advice from a qualified lawyer or other qualified professional, which will be responsive to the case or circumstance of the individual.
Please note that the content provided in this article or any content contained in or made available through any third party website linked to from this article and/or HRinfodesk, is provided “as is” without representations or warranties of any kind. All representations and warranties in respect of content or third party content, express or implied, including, without limitation any representations to warranties or conditions regarding accuracy, timeliness, completeness, non-infringement, merchantability or fitness for any particular purpose are hereby disclaimed.
 
 
 
 
 
 
 
 
 

What do you think of the new Ontario Retirement Pension Plan (ORPP)

What do you think of the new Ontario Retirement Pension Plan (ORPP) -www.aliko-aapayrollservices.com
 
 
 
What do you think of the new Ontario Retirement Pension Plan (ORPP)
 
 
Written by Sean Cooper
The Ontario Liberals’ recent majority victory means the Ontario Retirement Pension Plan (ORPP) will soon be a reality. The labour market in Ontario isn’t any different from the rest of Canada – there are the pension have’s and the pension have not’s.
Targeting The Pension Have Not’s
With each passing year, the number of workers covered by a workplace pension plan dwindles. Today only one-third of workers have a workplace pension plan, leaving two-thirds of workers on their own when it comes to retirement savings. The ORPP is designed to level the playing field, providing retirement income to those without a workplace pension plan.
What is the Ontario Retirement Pension Plan (ORPP)?
The ORPP is targeted at workers in the province of Ontario earnings up to $90,000 a year, who are not covered by a workplace pension plan. The ORPP would be a forced savings vehicle designed to help those struggling to keep up with the rising cost of living save for retirement. Similar to RRSPs, the ORPP would provide employees with a tax efficient way to save for their golden years.
Not everyone is a fan of the ORPP. The Canadian Federation of Independent Business has been especially critical of the pension plan, calling it a tax on small business.  In fact, the ORPP could lead to job loss, as employers may choose to set up shop in different provinces to avoid joining the mandatory plan. When introduced, employers without a workplace pension plan will have to contribute to the ORPP, on top of Canada Pension Plan (CPP) contributions.
How Costly Will the ORPP Be for Employers?
Under the ORPP, an employer would have to match an employee’s contributions of 1.9 per cent per year in earnings up to $90,000. Similar to CPP, the maximum earnings of $90,000 covered by the ORPP will increase each year based on the CPI.
For a worker earning $45,000 annually, the employer would have to match contributions of $66 per month ($788 annually).  For a worker earning double that amount annually, $90,000, the employer and employee would each have to contribute $137 per month ($1,643 annually).
Similar to CPP, the ORPP isn’t designed to fund a worker’s entire lifestyle in retirement. Much like CPP, it’s aimed at replacing 15 per cent of an employee’s working income in retirement. The middle-class and Millennials without the benefit of a pension plan would benefit most under the plan.
Workplace Pension Plans as an Employee Retention Strategy
A job for life may no longer be a thing of the past. Job stability is near a record high – about 50 per cent of Canadian workers have been with a single employer for five years or more, according to a new report from CIBC World Markets.  In fact, the likelihood of workers remaining with their employer rises with each year of seniority, starting at 60 per cent for those on the job for a single year, rising to 95 per cent for those on the job for five years or more. This flies in the face of reports that say job hopping is the new norm.
Why are employees remaining with their employer longer than ever before? Although a mediocre job market might have something to do with it, group benefits like workplace pension plans clearly matter to workers. Over three-quarters of new hires at employers offering traditional defined benefit (DB) pension plans said the retirement program gives them a compelling reason to stay on the job, according to the Towers Watson Retirement Attitudes Survey. This doesn’t just hold true for older workers – 63 per cent of workers under age 40 said their retirement program was an important factor in accepting their job.
The ORPP will help level the playing field by forcing employers to join if they currently don’t offer a workplace pension plan. However, there’s nothing to stop employers from going above and beyond the bare minimum by offering workplace pension plans. From traditional defined benefit plans to newer Target Benefit Plans (TBPs), there is no shortage of choices. Although offering these plans may be an expensive right now, they’re likely to pay off in the long-run, as employers will have a better chance of retaining their most talented employees.
Employers Have Plenty of Time to Prepare
Although the ORPP will be an added expense for employers in Ontario, the good news is employers have plenty of time to prepare.  The Liberals don’t plan to introduce the ORPP until 2017, when federal Employment Insurance premiums are expected to be reduced. The ORPP won’t be introduced in one fell swoop – contribution rates will be phased in over two years. Enrollment will be staggered, with the largest employers enrolling first, allowing small businesses plenty of time to budget. The ORPP will be mandatory for any employer who does not offer a registered pension plan.
 

Canada Revenue Agency/Ontario Government Implement Personal Tax

wwwwCanada Revenue Agency/Ontario Government Implement Personal Tax
 
 
 
 
Canada Revenue Agency/Ontario Government Implement Personal Tax
Increases Retroactive to January 1, 2014 for Employees Earning over
$150,000
 
 
 
 
Key Points
Increased taxes for employees earning more than $150,000 to be implemented through
higher payroll tax deductions from September to December and/or on 2014 tax returns
CRA publishes revised Ontario tax tables to implement retroactive Ontario tax increases
for employees earning over $150,000
CRA agrees to no penalty approach for employers
Discussion points for payroll staff and management: Who will be impacted and how?
Next Steps for Payroll Staff
Most employees earning over $150,000 will have a 3% or 6% increase in their Ontario taxes on
regular pay from September to December, 2014.
Background
Increased taxes for employees earning more than $150,000 to be implemented through higher
payroll tax deductions from September to December and/or on 2014 personal tax returns
On May 1, 2014 the Ontario government tabled a provincial budget that introduced higher personal
income tax rates for individuals earning over $150,000. These tax increases were to be retroactive to
January 1, 2014. This budget was defeated, triggering a provincial election. The current Liberal
government was elected with a majority on June 12, 2014 and re-introduced the budget which passed
July 24, 2014 with the same tax rate changes and retroactivity to January 1, 2014.
Current 2014 Ontario tax rates and
income thresholds
New 2014 Ontario tax rates and
income thresholds
Annual taxable income
($)
From – To
Provincial
tax rate (%)
Annual taxable income
($)
From – To
Provincial
tax rate (%)
0 to 40,120 5.05% 0 to 40,120 5.05%
40,120 to 80,242 9.15% 40,120 to 80,242 9.15%
80,242 to 514,090 11.16% 80,242 to 150,000 11.16%
514,090 and over 13.16% 150,000 to 220,000 12.16%
220,000 and over 13.16%
Prior to the Ontario Government’s July budget, the Canadian Payroll Association (CPA) had been
discussing various implementation scenarios for these proposed income tax rate and threshold
changes with the Canada Revenue Agency (CRA) and the Ontario Ministry of Finance.
2
Legislative Briefing: Ontario Personal Tax Changes
The purpose of our discussions was to advise government officials on the efficiency and compliance
implications for employers and payroll systems providers of mid-year changes and the complications
with retroactive adjustments in particular. While January 1 and July 1 income tax table updates are
expected and planned for, income tax changes at other dates require additional resources and
processes. Most government budgets are tabled in the spring, and the CRA and provinces have a tax
collection protocol that results in these changes being made using a July 1 tax table release. The
CPA has advocated strongly that these dates be honoured to provide employers, payroll service and
software providers, as well as governments, sufficient time to program payroll systems, then test and
implement changes to support compliance and efficiency. Because the Ontario budget was reintroduced
and passed on July 24, 2014, a July 1 income tax table change and resulting processes
are no longer possible.
The CPA made a number of suggestions to the CRA and the Ontario Ministry of Finance on how
employers could implement and comply with these unusual changes in an efficient and effective
manner while being fair to affected employees and protecting employers from compliance problems
and penalties. Suggestions included waiting to implement the tax rate changes until January 2015 or
enabling those affected to pay the retroactive amounts when filing their 2014 T1 personal tax return.
The Ontario government stood to forego $635 million in tax revenue by delaying the tax increases until
2015, and advised of the need to proceed with implementing the personal tax increases retroactive to
January 1, 2014. As a result, the CRA needed to determine how best to administer the rate increases
within the context of the Federal/Provincial Tax Collection Agreement that has been in place for
decades. The CRA has decided that it must apply the new tax rate by implementing a higher tax rate
in payroll deductions from September 1 to December 2014 to capture the amount of tax due from
January 1, 2014.
The majority of payroll service providers and software companies have a contractual obligation to use
the most current tax tables for their clients (employers) payroll processes.
Impact on Net Pay
CRA publishes revised tax tables to implement retroactive Ontario tax increases
The personal tax rate increases in the Ontario budget is 1% for earnings of $150,000 to $220,000
and 2% for $220,000 to $514,090. Because the tax increases are effective January 2014 but
implemented for only the last 4 months of 2014, the new CRA tax tables will result in these
employees having a 3% or 6% increase in their Ontario tax deduction on regular pay from
September to December, 2014. For employees who will reach this salary range between
September and December, the tax increase will not be retroactive.
The CPA is advising members and stakeholders that within this context, the CRA has agreed to some
of the CPA’s implementation suggestions and has posted the following on its website under “What’s
new for payroll”.
3
Legislative Briefing: Ontario Personal Tax Changes
Message on “What’s new for payroll” webpage
Payroll tables
The Canada Revenue Agency (CRA) will publish a September 1, 2014 version of the Ontario payroll tables
to incorporate proposed increases to personal income tax rates tabled in the Ontario budget on July 14,
2014. As the proposed changes are retroactive to January 1, 2014, the revised tables will reflect the
necessary prorated tax rates to allow employers to withhold the correct additional amounts from
employees between September and the final pay of 2014. The changes to the tables apply to employees
who earn more than $150,000 in 2014.
The September 1, 2014, version of Guide T4127, Payroll Deductions Formulas for Computer Programs is
now available on the CRA website.
The updated payroll deductions online calculator and the electronic version of the T4008 Payroll
Deductions Supplementary Tables and T4032 Payroll Deductions Tables for Ontario will be available on
our website by mid-August.
The paper and CD version of the T4032 will be available by the end of August.
Message on “T4127, Payroll Deductions Formulas for Computer Programs” webpage
Notice to the reader
The September 1, 2014, version of Guide T4127, Payroll Deductions Formulas for Computer Programs,
contains adjustments for proposed increases to personal income tax rates tabled in the Ontario budget on
July 14, 2014. The proposed changes are retroactive to January 1, 2014, and the revised tables reflect
prorated tax rates to allow employers to withhold the correct additional amounts from affected employees
between September and the final pay of 2014. The changes to the tables apply to employees who earn
more than $150,000 in 2014.
The CRA normally requires employers to withhold and remit income taxes in line with current rates, but
because of the complexities and timing of the Ontario budget measures it is recognized that these income
tax changes will be implemented on a best-effort basis where practical, in full appreciation of the different
payroll systems and administrative capacities of employers. Employers will not face penalties for failing to
withhold as a result of the Ontario budget measures introduced on July 14, 2014.
Employees whose employers are unable to change their payroll systems or processes on time can ask
their employers to increase withholdings from September to December 2014. This could reduce the
amount the employees owe when they file their 2014 income tax and benefit return.
Employers are encouraged to discuss these changes with affected employees.
4
Legislative Briefing: Ontario Personal Tax Changes
Implications/Points for Discussion between Payroll Staff and Management
Who will be impacted and how? Is the system change possible for September? What are the
next steps for payroll deductions?
The CPA’s advocacy goal is to increase the efficiency and effectiveness of payroll related legislation
and administration for all stakeholders - it does not advocate for higher or lower taxes. The majority of
payroll service and software providers have advised the CPA they will make the programming
changes required by September 1, 2014 to enable employers and Ontario employees affected to
comply with the higher tax rate.
The new tax table’s catch-up rate will deduct, in payroll processing, most of the additional tax liability
(approximately $485 million collectively) for those affected. A reduction in net pay ─ due to these
higher taxes ─ will reduce the possibility of a tax liability when the employee files their personal tax
return.
The CRA states, “Where employer payroll systems or processes are not changed, employees could
request employers to increase withholdings from September to December 2014 in an effort to reduce
an amount owing on filing of their 2014 tax return.” For these organizations, the CRA will enable
employees to request the additional taxes using Ontario TD1s effective from September to December
2014 and make any final payments owing on the T1 personal tax return.
This CRA/Ontario government approach will be efficient and effective for most stakeholders
(government, employers, payroll software companies, payroll service bureaus, outsourcing
organizations and employees) because:
 The personal tax rate changes only apply to fewer than 2% of Ontario employees but require
system-wide reprogramming for employers and the government.
 Payroll systems are based on the CRA’s T4127 guide that has one prescribed tax rate for each
specific income threshold, so there can be no variability among employees within each
organization.
 For employers/organizations with in-house or off-the-shelf systems, and/or other constraints,
they have the option to not change or use the revised tax rates, and continue with the existing
rates. High income earners should be encouraged to request additional income tax using an
Ontario TD1.
 Employers using manual tax tables or the CRA’s Payroll Deduction Online Calculator (PDOC)
will have access to the new versions by mid-August.
Employers should be ready for questions from Ontario employees earning over $150,000 as their pay
cheques for the months of September to December 2014 will be lower when payroll systems are
programmed with the new tax rates.
For your benefit as a member of the Canadian Payroll Association, we suggest you share this Ontario
tax rate briefing with senior management, and initiate a discussion about the impact on employees
earning over $150,000 to explain the situation and identify the implications for them as employees and
you as the person responsible for the organization’s payroll compliance with government regulations.
5
Legislative Briefing: Ontario Personal Tax Changes
Next Steps for Payroll Staff
Scenario 1: You have asked and received confirmation from your Payroll Service or Software
Provider (PSSP) or your Information Systems staff that your payroll system will be updated with the
revised Ontario income tax tables effective September 1, 2014.
Step 1: Notify senior management of the implication for Ontario employees who earn over $150,000 of
the increases to their personal income tax rates by providing a copy of this CPA briefing.
Step 2: Suggest to senior management that the organization provide a copy of this CPA briefing to all
Ontario employees earning over $150,000. A French copy of this briefing is available.
Step 3: Remind affected employees that the payroll system will only calculate additional taxes for their
employment income and that the Ontario personal tax increases also apply to other sources of income
such as investment and rental income. Offer those employees the opportunity to request additional taxes
from September to December 2014 using an Ontario TD1 (TD1ON) to reduce a potential tax liability on
their taxable income when they file their T1 personal income tax return. (Suggest a discussion with a
financial advisor or tax expert.)
Step 4: Process any requests for additional income tax and set a reminder to cease additional taxes for
the first pay period of 2015 (or set the amount back to the amount that the employee had prior to this
transitional increase).
Scenario 2: You have asked and received confirmation from your Payroll Service or Software
Provider (PSSP) or your Information Systems staff that your payroll system will NOT be updated with
the Ontario income tax tables effective September 1, 2014.
Step 1: Notify senior management of the impact on Ontario employees who earn over $150,000 of the
increases to their personal income tax rates by providing a copy of this CPA briefing.
Step 2: Suggest to senior management that the organization provide a copy of this CPA briefing to all
Ontario employees earning over $150,000. A French copy of this briefing is available.
Step 3: Advise affected employees that they will likely have a tax liability when they file their T1 personal
income tax return. Offer to calculate the additional taxes that would have been deducted each pay period
by using the September versions of either the CRA’s Payroll Deductions Online Calculator (PDOC) or the
T4032 Payroll Deductions Tables for Ontario based on your employee’s payroll frequency (monthly, semimonthly,
bi-weekly, weekly). Both of these CRA publications will be updated with the new Ontario rates
by mid-August.
Step 4: Offer affected employees an Ontario TD1 (TD1ON) to request additional income taxes from
September to December 2014 to reduce a potential tax liability on their taxable income when they file
their T1 personal income tax return. (Suggest a discussion with a financial advisor or tax expert to
discuss the additional impact of other sources of income such as investment and rental income.)
Step 5 (Optional): Ask employees who reject the offer of deducting additional taxes to complete a written
acknowledgement form that you notified them of the tax increases and that they did not authorize
additional taxes be deducted. (You may use the acknowledgement form provided at the back of this CPA
briefing.)
Step 6: Process any requests for additional income tax and set a reminder to cease additional taxes for
the first pay period of 2015 (or set the amount back to the amount that the employee had prior to this
transitional increase).
6
Legislative Briefing: Ontario Personal Tax Changes
Conclusion
The Canadian Payroll Association is fundamentally opposed to retroactive adjustments to payroll
requirements because these cause administrative, compliance and financial burdens on employers,
employees and government, and result in costs, confusion and frustration for everyone.
However, the CPA respects the decisions of the Ontario government and the CRA to enable
employers and employees to most efficiently and effectively comply with the tax changes by:
 revising the tax tables for payroll remittances so that the majority of the tax increase for those
affected will be implemented using the existing process, while
 being flexible and enabling employers to assess the implications on their systems and
implement the changes on a best efforts basis with no penalties for employers who do not
make the payroll system changes in the short time period now available.
7
Legislative Briefing: Ontario Personal Tax Changes
Appendix 1
Employee Acknowledgement Form
I, ___________________________, acknowledge receipt from my employer that the
(print name)
payroll system has not been updated with the Ontario personal income tax increases and that
I will be responsible for any personal income tax liability on my taxable income when I file my
personal income tax return.
____________________________ __________________________
(signature) (date)
8
Legislative Briefing: Ontario Personal Tax Changes
Appendix 2
Previous Experience
The CPA’s previous advocacy experience on a similar situation
This is not the first time that the CPA has advocated on behalf of employers with the CRA and a
provincial government when the latter legislated income tax changes after July 1. In 2001, the Ontario
government lowered income tax rates effective October 1 of that year. The CRA and Ontario Ministry
of Finance asked for the CPA’s input on how to implement the changes in an efficient manner. At the
time, the CPA got involved and pointed out that:
 The tax rate changes were relatively small.
 Employees would benefit from the decrease when filing their personal tax returns if their
employers’ payroll system had not changed.
 It would cost millions of dollars for employers to implement system changes for three months.
It was therefore agreed that the adjustment to payroll system changes would be made on a best
efforts basis. Most of the payroll service and software providers made the changes, while many
smaller employers or those with in-house systems did not make the changes but advised their
employees that they would receive the benefit when they filed their T1 (personal return).
The key differences between the previous Ontario tax adjustment in 2001 and the current situation
are:
 This is a tax increase on employees earnings more than $150,000, which represents fewer
than 2% of all employees, while in 2001 it was a small tax decrease for everyone i.e., across
all employment income thresholds.
 This adjustment is for a full year with 8 months’ retroactive and 4 months going forward
compared to a reduction for 3 months for the remainder of the year in 2001.
 The Ontario government just won an election on June 12 with a budget that included this
personal tax increase on income earners over $150,000 and which has been known since
May.
 The province of Ontario has a big deficit and is being encouraged by most stakeholders to
reduce it.
Financial planners, accountants and media stories have already advised the higher income earners
affected to seek advice from professional finance and tax planners to determine if, and how, to deal
with any personal tax liabilities.
 
 
 
 
 
 
 
 
 
 
 
 
 
w

How to Do Payroll – Employment Deductions (EI)

How to Do Payroll – Employment Deductions (EI)
How to Do Payroll – Employment Deductions (EI) -www.aliko-aapayrollservices.com/blogWhen it comes to EI deductions, some small businesses risk overpayment, others underpay and some opt out (legally). How can you ensure you’re getting it right?
What is EI
Employment Insurance provides temporary financial assistance to unemployed Canadians who have lost their job through no fault of their own, while they look for work or upgrade their skills” (source: Government of Canada). It also assists Canadians with maternity, parental, sickness and compassionate care benefits.
If you are self-employed (operate your own business)
You have the option to contribute to EI or opt out of making payments. Remember if you don’t opt in you won’t be eligible should you ever require payments. It’s also important to note if your business were to fail you would not be eligible for EI payments.
So is it worth it for you? Each situation is unique, Larry MacDonald of MoneySense magazine says it’s worth considering if you see yourself needing time away from work. Otherwise, “if you think it’s unlikely you would ever take much time away from your business it’s probably not worth the cost”  Employment issuance: The entrepreneur’s dilemma.
www.aliko-aapayrollservices.com/blog
As per Canada Revenue, there are five types of EI special benefits:
·         Maternity benefits
·         Parental benefits
·         Sickness benefits
·         Compassionate care benefits
·         Parents of critically ill children benefits
Be aware “some individuals who work independently and are not hired as employees cannot register for these EI special benefits for self-employed people because they are already eligible to receive benefits through the regular EI program” Canada Revenue. Learn if you qualify and how to apply here.
www.aliko-aapayrollservices.com/blog
If you run a family business
www.aliko-aapayrollservices.com/blog
According to Canada Revenue, “If you are a family member, i.e. spouse or child, paid as an employee by the family enterprise – business or farm – you are like any other worker and can be paid EI benefits, as long as you meet the requirements for regular, maternity and parental, sickness or compassionate care benefits.” (Source: Employment Insurance and self-employed, farmers and independent workers).
Do your research to determine what’s right for you and your individual situation. If you’re not sure about the status of your company’s employees and whether they would qualify for EI should they need it, you can request a ruling from the CRA. Learn more in Should your family-run business pay into EI for relatives?
Employment Insurance can’t be collected by most relatives in family-run businesses. If you hire employees for your small business.
When you open a small business, you are responsible for paying your employees accurately and remitting payroll deductions. EI premiums are one of those deductions. What you can do
You have a choice – You can do research to determine the EI requirements for your small business and hope you get it right or you can rely on certified payroll professionals can help you determine your needs and provide accurate, reliable payroll with or without EI deductions.
www.aliko-aapayrollservices.com/blog
 

Small business owners – Are you confident you are classifying employees correctly?

Are you confident you are classifying employees correctly? -www.aliko-aapayrollservices.com
 
 
 
Small business owners –  
 
Are you confident you are classifying employees correctly?
 
 
 
Do you know the difference between an employee and an independent contractor? Whether you are an entrepreneur who has recently incorporated and are starting your own small business or you are a the small business owner responsible for hiring workers, it’s important to be compliant with HR law.
DID YOU KNOW: 2.7 million Canadians were self-employed in 2013
There are many advantages of bringing on someone who is self-employed but did you know you are assuming some risk by entering into this relationship? Although a independent contractual relationship is considered mutually beneficial, it is important business owners appreciate they are assuming a material risk in entering into this relationship.
Legislation and Employer Obligation
Risk arises when the relationship is improperly classified as an independent contractual relationship when it actually mirrors that of an employee. Where the business fails to properly treat the relationship as an employment relationship, the business may be subject to penalties, including fines and potentially even jail time, under various statutes. The chart below highlights specific legislation and employer obligations.
Legislation and Employer Obligations
·         Income Tax Legislation: Deduct and remit income tax
·         Employment Insurance Act/Canada Pension Plan: Deduct and remit EI and CPP/QPP premiums for employees
·         Employment Standards Legislation: Ensure employees are provided with minimum terms and conditions of employment respecting hours of work, overtime, minimum wage, public holidays, leaves of absence, etc.
·         Workers’ Compensation: Premium contributions per employee
Classifying Employees
So, how do you determine whether a relationship is an independent contractual relationship or an employment relationship? There are four recognized tests which courts, tribunals and government agencies generally apply in determining the relationship:
1.    The Control Test
·         The degree of control and independence the individual has in the workplace over such matters as the following:
o   Performance of the services
o   Negotiation of compensation
o   Defining the scope of work
o   Supervision, and evaluation of services
o   Determining the time, place, and manner in which the service is to be performed
In other words, does the Organization exert the type of control over the individual providing the service that it appears to look more like an employment relationship?
1.    The Integration or Organization Test
·         If the services performed by an individual form an essential part of the Organization’s day-to-day business, the individual is more likely to be considered an employee
1.    The Economic Reality or Entrepreneur Test
·         Factors that are relevant to determining whether the individual is actually an independent business person include:
o   Does the individual own his/her own tools?
o   Does the individual assume a risk of profit/loss?
o   Has the individual made an investment in the business?
1.    The Specific Result Test
·         Unlike employees, independent contractors typically are engaged to complete a specific project. Relevant considerations under this test include:
o   Whether the contract is for a finite term or a specific result
If a worker is a true “independent contractor” the following will be true:
·         Organization makes no statutory deductions and provides no health and welfare benefits
·         Hours of work are not monitored and there is little direct supervision
·         Finite term contract with specific tasks/projects listed
·         No reimbursement by the Organization for expenses
·         Payments are made by way of invoice based on fees charged by the independent contractor
·         The independent contractor is incorporated and the Organization contracts with that incorporated business
·         HST/GST/provincial sales tax is charged to the Organization
At the end of the day, it should pass a simple test: Is the individual actually operating an independent business

Aliko Payroll Services- Flat Fee Payroll Services - $600.00/month

Aliko Payroll Services-   Flat Fee Payroll Services -  $600.00/month -www.aliko-aapayrollservices.com
 
 
 
Aliko Payroll Services-   Flat Fee Payroll Services -  $600.00/month 
 
 
 
 
When operating a small business, there are countless little tasks that need to be handled in order to run a workforce effectively. Every worker has certain expectations with respect to wages, benefits and other forms of employee support, and there are many logistical hurdles and pieces of paperwork that come along with them.
For big businesses, this is no problem But for smaller enterprises, it’s different. Even a simple task like processing payroll can be taxing on a small business’ time, money and manpower.
There’s no better time than right now to search for a solution to this problem. It’s possible that, depending on your circumstances, outsourcing the payroll process might make sense if you’re running a small business.
Aliko  Payroll Services offers such a service.
Here are three  important issues to consider as you’re weighing your payroll outsourcing options.
Maintaining compliance
There are a lot of little laws that you need to follow when processing employees’ paychecks on a regular basis. Part of the process should be vigilantly monitoring the evolution of payroll legislation, watching for any new changes and shifting your company’s strategy to obey any new regulations that come your way.
If you’re running a small operation, it can be difficult to find time in the day for making sense of all these laws. But with an outsourcing service, it becomes easier to have someone else do that work for you, keeping up with changes in such regulations as the Affordable Care Act.
Taking care of business effectively
There’s very little room for error when processing company payroll. Workers want every paycheck to arrive on time and in the full amount. If not, there will  be trouble.
An outsourcing service makes it a certainty that every pay cycle will be processed on time, and with 100 percent accuracy. There will be no delays, no errors and no trouble with non-compliance. In addition, staff members will be on hand to answer any payroll-related inquiries that employees might have at any step along the way.
Keeping the machine running smoothly
Processing payroll should be a basic part of  operations, not a massive project that drags your company down. Ideally, you’d be able to have each employee paid each week or each month without any interruptions in other projects or business initiatives.
Small Businesses should have all the time they  need to investtheir  skills and talents fully into achieving  their strategic goals. If a little thing like payroll processing is getting in the way, now might be the right time to reach out to us for a little help.
 
 
 
 
Aliko Payroll Services-   Flat Fee Payroll Services -  $600.00/month 
serving Toronto, Etobicoke, Mississauga and Brampton area .
If you do require our  payroll services please feel free to reach out to us at anytime and we will be more than glad to assist.
 
 
If you have a moment please check out our website 
 
 
Best Regards,
Anila Aliko
Founder and CEO of Aliko-AA Payroll Services 
Phone : 416-908-2725
 
 
 
 
  
 
 
 
 
 

Aliko Payroll Services - Flat fee payroll services $600.00/month

Aliko Payroll Services  -www.aliko-aapayrollservices.com
 
 
 
Aliko Payroll Services
 
 
servicing Toronto, Etobicoke, Mississauga and Brampton area .   
Affordable  payroll services  for small businesses . 
 
 
 
 
Flat fee payroll services $600.00/month 
 
 
 
If you do require our  payroll services please feel free to reach out to us at anytime and we will be more than glad to assist.
 
 
If you have a moment please check out our website 
 
 
 
 
Best Regards,
            Anila Aliko
 
 
Founder and CEO of Aliko-AA Payroll Services 
Phone : 416-908-2725